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Investing.com -- Sodexo (EPA:EXHO) on Tuesday said it expects fiscal 2025 revenue growth to be at the lower end of its forecast range, following third-quarter results that showed mixed regional performance and currency headwinds.
The company reiterated its full-year guidance of 3% to 4% organic revenue growth and a 10 to 20 basis point improvement in underlying operating profit margin at constant currencies. However, it now expects to reach the lower end of both ranges.
The French food service company posted third-quarter fiscal 2025 revenue of €6.1 billion, up 0.8% from €6.07 billion a year earlier.
While organic growth reached 3%, revenue was lowered by 2.1% due to currency effects and by 0.2% from the net impact of acquisitions and disposals.
North America revenue declined 1.1% year-on-year to €2.87 billion. Organic growth of 1.2% was supported by pricing and new business wins in Business & Administrations and Education, but was offset by contract exits, including a major global facilities management contract.
Healthcare & Seniors revenue fell 0.1% due to site losses in Canada and slow onboarding of new contracts. Sodexo Live! rose 3.9%, driven by increased airline lounge activity.
In Europe, revenue rose 3.8% to €2.18 billion, with 3.3% organic growth. Sodexo Live! posted the strongest increase at 15.7%, helped by U.K. stadium volumes and French tourism.
Healthcare & Seniors grew 7.4%, supported by contract mobilizations in France and Belgium. Business & Administrations was up 1.0%, and Education rose 0.3%, reflecting pricing gains and previous contract losses.
Revenue in the Rest of the World segment was stable at €1.07 billion, but organic growth reached 7.5%, led by strong results in India, Brazil and Australia.
Healthcare & Seniors grew 21.5%, Sodexo Live! rose 20.2%, Education was up 8.9%, and Business & Administrations increased 6.1%. In this region, currency impacts, particularly from the Brazilian real, decreased revenue by 6.5%.
For the first nine months of fiscal 2025, Sodexo reported total revenue of €18.6 billion, a 2.3% year-on-year increase.
Organic growth was 3.4%, with segment growth led by Sodexo Live!, Healthcare & Seniors, and Business & Administrations. Education saw minimal growth at 0.2%.
Currency fluctuations, especially the depreciation of the U.S. dollar and Latin American currencies against the euro, had a significant impact, partially offset by the British pound.
In May, Sodexo Inc. raised $1.1 billion in two bond tranches maturing in 2030 and 2035, with coupons of 5.150% and 5.800%. Proceeds were partly used to repurchase 2026 notes.
In April, subsidiary Entegra acquired French group purchasing firm Agap’pro to expand its procurement services.